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EXAM NUMBER: ________________

CDN & US Contracts (LAWG-5814)
Prof. Troy L. Harris
University of Windsor Faculty of Law
University of Detroit Mercy School of Law
Final Examination, Winter 2020
10 Short Answer Questions (100 marks) + 1 Essay Question (50 marks)
Total Exam Time: 3 hours
EXAM INSTRUCTIONS
1. This final exam counts for sixty percent (60%) of your final grade in this course. The
exam consists of six (6) pages, including these instructions. Please make sure that your exam
has all pages.
2. This is an open-book exam, including hard copies of any materials and access to your
laptop’s hard drive but excluding access to the internet. You may not, however, collaborate
with any other person, whether in person or electronically.
3. Except for your computer and any e-book reader, you must turn off all electronic
devices, including but not limited to cell phones and PDAs, during the exam. You may not place
or receive telephone calls or electronic messages of any kind during the exam.
4. The exam consists of ten (10) short answer questions and one (1) essay question. You
may allocate your time however you wish. However, I recommend that you spend some time
outlining your answers before you begin writing.
5. All answers must be written in ink in separate exam books or typed on your computer.
You may also write on the exam itself, but under no circumstances will you receive credit for
the notes or comments written on scratch paper or on the exam. You will only receive credit
for what is actually written in the exam books or on your typed printout. ON THIS EXAM, AS IN
PROFESSIONAL LIFE, NEATNESS AND ORGANIZATION COUNT. Writing that is illegible is
ungradeable. If you need additional facts to provide advice on a given issue, identify specifically
what additional facts are required and what difference those facts might make to your
conclusions.
6. You may use as many exam books as you need. If using multiple exam books, please
number each exam book (e.g., “1 of 3,” “2 of 3,” etc.), so that I can move seamlessly from one
to the next in reviewing an answer.
7. Please write your answers on only one side of each exam book page and PLEASE
WRITE ON EVERY OTHER LINE.
8. Please be sure to place your exam number on the exam itself (there is a boldface space
provided for this number) and on your exam book(s). Do not write your name on any of these
materials.

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9. PLEASE TURN IN THIS EXAM AND EACH EXAM BOOK YOU WISH TO HAVE GRADED.
10. You must stop writing when time expires at the end of the exam period.

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Part I: Short Answer (10 Questions; 10 marks each; 100 marks total)
For Part I, you should assume that Canadian and U.S. law are the same.
1. Plaintiff is a sixty-nine-year-old retired labourer with a ninth-grade education. In 1971,
Plaintiff and his wife purchased a home for $8,600 and took out a mortgage. By 1984, Plaintiff
was in arrears. The mortgage lender instituted foreclosure proceedings and obtained a default
judgment against him. At that time, the fair market value of the home was $19,800 and the
balance of the mortgage was $8,000. On May 13, 1984, Defendant, a licensed real estate
broker, went to Plaintiff’s home unsolicited. Plaintiff believed that Defendant was offering to
lend him money to pay off his arrears. Early the next morning, Defendant took Plaintiff to
Defendant’s lawyer to sign several documents. The documents were not explained to Plaintiff,
and Plaintiff was not advised he had the right to seek legal advice. Plaintiff believed he was
signing loan documents, but in fact, he signed a deed transferring his property to Defendant.
The deed stated that Plaintiff received $7,000 in consideration, but Plaintiff was not
compensated for the house. Moreover, Defendant never paid off the balance of the
outstanding mortgage or satisfied the default judgment against Plaintiff. Thus, Plaintiff
remained personally liable for the mortgage. Plaintiff remained in the home as a tenant of
Defendant’s. Although his rent was initially close to the amount of the monthly mortgage,
Defendant raised it substantially over the course of seven years. By May 1991, Defendant
believed he had paid more than the amount he owed Defendant and stopped making
payments. Plaintiff has sued Defendant seeking cancellation of the deed. How will a court
likely rule? On what basis?
2. Plaintiff tobacco farmer brought suit against Defendant crop insurer for losses sustained
due to alleged rain damage. Subsequent to the damage, the plaintiff had ploughed over the
fields to sow a protecting cover crop; this obliterated the plant stalks before the insurance
adjuster inspected. The insurance policy contained a provision that the stalks remain intact
until inspection. Defendant moves for summary judgment that the policy provision was a
condition precedent to its obligation to pay for any loss due to the alleged rain damage. How
will a court likely rule on Defendant’s motion?
3. Entrepreneur has a new idea for marketing low-cost vacation packages. It pitches the
idea to Profitco, a discount retailer with locations throughout the country. Profitco and
Entrepreneur enter into a three-year contract under which Profitco will provide Entrepreneur
dedicated space within each of Profitco’s locations, in exchange for a flat fee per location plus a
percentage of all profits Entrepreneur earns through the venture. Entrepreneur spends
$50,000 in Entrepreneur-Profitco co-branded advertising materials to promote the venture and
reasonably projects a first-year profit of $1.2 million. One week before the grand opening of
the co-branded locations, Profitco abandons the scheme as too far removed from its core
business model and so informs Entrepreneur. What, if any, remedy does Entrepreneur have?
Explain.
4. In August 1986 Plaintiff began negotiating for the purchase of trucks and hauling
equipment from Defendant. The initial agreement between the parties provided that Plaintiff
would have the exclusive right to haul peanuts for Defendant in Texas. However, Defendant’s

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corporate office objected to granting Plaintiff exclusive hauling rights. The parties thereafter
entered a written agreement providing that Defendant was under no obligation to engage
Plaintiff to haul peanuts. Before signing the contract, Plaintiff questioned this provision.
Defendant’s manager explained that it meant Defendant would not use Plaintiff’s hauling
services if he failed to meet Defendant’s expectations. Plaintiff signed the contract upon
receiving this explanation. Thereafter, Defendant used other trucking companies to haul
Defendant’s peanuts and refused to use Plaintiff. Plaintiff sued Defendant for breach of
contract, arguing he was entitled to exclusive hauling rights. At trial, Defendant moves to
exclude evidence of the manager’s explanation. How will the court likely rule?
5. Buyer agreed to purchase property from Seller. Prior to the sale, a termite service
informed Seller’s agent that the property had previously been infested with termites and that
there was extensive damage. Seller’s agent showed only a part of the damaged area to Buyer,
claiming that this was the only damaged area and that all necessary repairs had been made.
The agent was aware at the time that the extent of the damage was greater and that the
nonvisible damage had not been repaired. The contract included a disclaimer clause stating that
the sale was based on Buyer’s personal inspection of the property and not on any
representations of the agent. It also provided that Buyer was receiving the property “as is.”
Buyer sues Seller for fraudulent misrepresentation. Analyse.
6. Plaintiff contracted with defendant to design and fabricate a machine for $1 million.
After a dispute arose between the parties regarding the timeliness of plaintiff’s performance,
plaintiff delivered the nearly-completed machine to defendant, which defendant refused to
accept. Plaintiff now sues defendant for the contract price, less any costs to defendant of
completing the remaining fabrication and installation. What result?
7. Employer entered into a separation contract with employee to terminate employee’s
employment contract and to provide a generous severance package in exchange for a release
from employee of any further liability under the employment contract. Thereafter, employer
learned of wrongdoing by the employee that would have permitted the employer to terminate
the employment contract for cause, thereby rendering payment of the severance package
unnecessary. Employer now seeks to rescind the separation contract and to recover the
severance payment made under it. Analyse.
8. Lessee contracts to pay lessor $5,000 for the use of street-side rooms of an apartment
during the day for two specific days during which a parade is expected to take place honouring
the Toronto Raptors’ for their NBA championship. The street-side rooms have an excellent
view of the planned parade route. The contract requires the payment to be made at the time
the contract is signed, which lessee does. Unfortunately, the parade is thereafter postponed
due to a viral pandemic. Can lessee recover its pre-payment? Explain why/why not.
9. Widget Manufacturer’s widget-making machine has a broken cog, and Widget
Manufacturer does not have a spare cog or a backup widget-making machine. Widget
Manufacturer sends the cog via DefEx to a machine shop to be repaired. The normal downtime
of Widget Manufacturer’s widget-making machine associated with such a repair, including
transportation to and from the machine shop, is one week. DefEx misdirects the cog, however,
resulting in a delay of one week, and therefore the total downtime ends up being two weeks.

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What must Widget Manufacturer prove in order to recover its lost profits associated with the
extra week of downtime?
10. A written agreement between Seller and Buyer for the exchange of real estate provides
that Seller and Buyer will each pay a $200 commission to Broker, “upon the signing of this
agreement by both parties hereto.” The last sentence of the agreement states, “The
commission being due and payable upon the transfer of the properties.” It is shown that Seller
refused to sign the agreement until the last sentence was added. When is the commission
payable?

End of Part I

Proceed to Part II

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Part II: Essay (1 Question; 50 marks total)

Sparrow Contracting was the general contractor (General Contractor) on a construction
project. Sparrow subcontracted a portion of the work to Morris Mechanical (Subcontractor)
and required Morris to obtain a labour and material payment bond naming Sparrow as trustee.
The bond allowed for a provider of work who had not received payment from Morris to sue
Safety Surety (Surety), a company acting as a surety, for that unpaid sum. Morris contracted
with Suzy Supplier (Supplier) to provide work on the project. The relevant terms of the bond are
set forth below:
Subcontractor and Surety, jointly and severally agree with the General
Contractor, as Trustee, that every supplier who has not been paid as provided
for under the terms of its contract with the Subcontractor may, as a beneficiary
of the trust herein provided for, sue on this Bond for such sum or sums as may
be justly due to such supplier under the terms of its contract with the
Subcontractor and have execution thereon.
Subcontractor became insolvent and some of Supplier’s invoices went unpaid.
(a) Assume that Canadian common law applies. If Supplier sues Surety for the unpaid invoices,
how will a court likely analyse Supplier’s and Surety’s rights and obligations under the bond?
(b) How, if at all, would your answer change if U.S. law applies?

End of Part II
End of Examination

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